November 19, 2010

Vietnam aquaculture sector hurt by raw material shortage

Seafood processing plants in Vietnam have been running at only 40%-50% capacity since the start of the fourth quarter, due to a shortage of raw materials, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

The shortage has resulted in a price increase. On November 16, tra fish were being sold for more than VND21 million (US$1,000) per tonne, an on-month increase of VND5 million (US$256).

The cost of shrimp also increased by 15%-20% compared to a month ago. These increases have forced prices up and many exporters are operating at a loss, struggling to meet contracts that were signed several months ago when the price was lower.

Director of An Giang Fisheries Import and Export Joint Stock Company (Agifish), Nguyen Van Ky, said his company had only exported small volumes of seafood recently, and may fail to reach its target of US$60 million this year due to the shortage.

VASEP said more and more farmers were becoming less inclined to invest in aquaculture, despite the fact the price of seafood products on the world market was increasing.

Farmers were reluctant to take out loans due to high interest rates of up to 17% on top of the increasing cost of feed, VASEP said.

According to VASEP, the shortage would be difficult to solve in the short term.